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| Babies R US |
Neil Friedman, 63, will oversee Toys "R" Us's 866 U.S. stores and its online business as president of its U.S. business, and will report to Chairman and Chief Executive Gerald L Storch. Storch, 54, joined Toys "R" Us several months after it was taken private by a consortium in 2005, leaving behind a high-level role at retailer Target Corp. (TGT).
Friedman left Mattel Inc. (MAT) last month after 14 years at the company, most recently as president of Mattel brands. He left the world's largest toy maker on March 25 for "good cause," Mattel said in a proxy filing last week, and received $8.1 million in severance. During 2009 and 2010, Friedman received a combined $5.3 million in salary and cash incentive payments, and he leaves the company owning stock and options valued at more than $50 million today.
In his new role, Friedman will oversee all merchandising, marketing and store operations. Toys "R" Us, with $13.86 billion in revenue for its fiscal year ended in January, generates well more than double the annual sales of Mattel, but Mattel for its most recent year ended in December posted quadruple Toys "R" Us's profit. In addition to its 866 Toys "R" Us and Babies "R" Us stores in the U.S. and its websites, Toys "R" Us operates hundreds of stores more internationally.
A Toys "R" Us spokeswoman declined to comment beyond the press release announcing the move, but said more details will be filed with the Securities and Exchange Commission in a forthcoming 8-K report. Mattel representatives didn't respond to emails seeking comment.
Moving to Toys "R" Us brings Friedman back to the East Coast; he relocated to Los Angeles from New York in 2007 to be closer to Mattel's California headquarters. He joined the toy maker in 1997 when Tyco, where he was president of preschool toys, was bought by Mattel. Friedman was named to the Toy Industry Hall of Fame in 2004 and the International Licensing Industry Merchandisers' Association Hall of Fame in 2007.
The toys, games and baby-products seller in May said it would go public again. It was bought in July 2005 by private-equity firms Bain Capital LLC and Kohlberg Kravis Roberts & Co., along with real-estate investment trust Vornando Realty Trust (VNO), for $6.6 billion and remains heavily in debt from the buyout.
There is no indication that Storch is interested in leaving Toys "R" Us after it returns to life as a public company, but in much the same way the new owners brought him in to replace existing management after they bought Toys "R" Us, it isn't uncommon for existing executives to depart newly public companies once the private owners begin to unwind their stakes.
Friedman's compensation package hasn't yet been revealed, but it appears unlikely it will be significantly larger, if at all, than what he received at Mattel. Storch recently had his annual salary increased $50,000 to $1.2 million, and he received a $1.4 million cash incentive in fiscal 2010; Friedman's 2010 salary was lower, at $1 million, but his incentive was larger, at $1.7 million, bringing him ahead of Storch in annual cash remuneration.
